The auction scene, and why high reserves are detrimental
TahoeDale
Posts: 1,785 ✭✭✭
The activity of the bidding process during an auction can be wild and crazy, or just dull.
When there are multiple bidders for a rare coin, the liklihood of higher prices realized increases
when the starting bid is substantially under market value. But where the start is at the probable
retail or end result, little occurs that can help the final price to be high.
Why? I have been at many sales, as have others, where once you start bidding, and see others also involved, you
get the feeling that the coin in question has value to many, not just you. And there is competition, bluffing,
waiting, and in some cases, no end to the sale til someone just gives up.
The winning bidder may be buried, but he WON! Touchdown!!
I am not suggesting that you overpay for a common coin, just to win.
I am suggesting that high reserves on almost all coins stiffle bidding.
When there are multiple bidders for a rare coin, the liklihood of higher prices realized increases
when the starting bid is substantially under market value. But where the start is at the probable
retail or end result, little occurs that can help the final price to be high.
Why? I have been at many sales, as have others, where once you start bidding, and see others also involved, you
get the feeling that the coin in question has value to many, not just you. And there is competition, bluffing,
waiting, and in some cases, no end to the sale til someone just gives up.
The winning bidder may be buried, but he WON! Touchdown!!
I am not suggesting that you overpay for a common coin, just to win.
I am suggesting that high reserves on almost all coins stiffle bidding.
TahoeDale
0
Comments
<< <i>I am suggesting that high reserves on almost all coins stiffle bidding. >>
I believe this is widely known. All bidders prefer no-minimum-no-reserve auctions because of the opportunity to get a possible "bargain." You need to convince consignors that the risk of their coins selling for bargain prices in a no reserve sale is outweighed by the probability of frenzied bidding.
results are good.
As a buyer, I just skip by coins with reserves, buy it now, zero bids. I like to see bidder activity.
Edit: All coins sold on ebay were under $3500 numismatic value (i.e. not buillion).
I don't understand people who are so concerned about winning an auction lot - any auction lot - that they are willing to be buried in it just to say they have won.
You might be right from the consignor's point of view. However, as a bidder, I was able to snag a hard to find type coin because I met the high reserve, and no one else would bid on the coin after that.
I honestly think the coin will sell itself.
"Seu cabra da peste,
"Sou Mangueira......."
This opinion is from a consignor's viewpoint. And in most auction company's business plan.
But I do appreciate that some coins will sell for different amounts, depending on who is interested at
the time for the date/grade.
My approach to setting any reserve( if necessary), is at least 10% below the lowest amount I think
the coin will sell for. And with the agreement of the auction house. Avoid seller's fee at all cost.
<< <i>What about appropriate opening bids? W/gold up so high would you risk losing a bunch of generic $20's for way way way below melt? Or would you reserve them at melt? Or just let them go and whatever happens will happen? >>
Those are the kinds of things that really don't belong at auction. Why go to all of the trouble to sell stuff like that at auction [plus the risk of getting scammed on eBay] when it's probly smarter and easier just to take them to a local B & M?
<< <i>The activity of the bidding process during an auction can be wild and crazy, or just dull.
When there are multiple bidders for a rare coin, the liklihood of higher prices realized increases
when the starting bid is substantially under market value. But where the start is at the probable
retail or end result, little occurs that can help the final price to be high.
Why? I have been at many sales, as have others, where once you start bidding, and see others also involved, you
get the feeling that the coin in question has value to many, not just you. And there is competition, bluffing,
waiting, and in some cases, no end to the sale til someone just gives up.
The winning bidder may be buried, but he WON! Touchdown!!
I am not suggesting that you overpay for a common coin, just to win.
I am suggesting that high reserves on almost all coins stiffle bidding. >>
Psychology works in strange and mysterious [and sometimes even wonderful] ways.
For the life of me I can't see why anyone would bid high just to be able to say he/she/they won unless it was something that they wanted.
But if it's a corner case coin, like a conditional rarity, I use a reserve. It doesn't always sell but at least I don't get burned.
As for a bullion coin, in my experience it doesn't sell for less than its bullion value. And if I am okay with that price then I don't use a reserve.
Lance.